Expect the biggest market moves after Powell
Stocks are quiet on Wednesday morning. But recent history tells us that's too be expected on a day when the market is waiting for a Fed decisions and press conference from Chair Powell.
A chart from Bespoke Investment Group shows most of the trading action on Fed days comes after Powell begins his press conference around 2:30 p.m. ET.
During the past ten Powell presser's (shown in red) stocks have rallied before eventually giving back a large portion of their gains and closing below the highs of the day.
Wed, September 18, 2024 at 2:32 PM GMT+1
Stocks waver at the open
Stocks were little changed at the open on Wednesday as investors patiently await the Federal Reserve's next monetary policy decision at 2 p.m. ET.
As debate swirls about whether the Fed will cut interest rates by 25 or 50 basis points, the three major indexes appeared to be in wait-and-see mode.
Wed, September 18, 2024 at 1:57 PM GMT+1
Housing starts jumped in August amid declining mortgage rates
New residential construction increased in August as mortgage rates continued their decline.
Housing starts rose 9.6% from the previous month to a seasonally adjusted annual pace of 1.356 million units, according to data from the Census Bureau released Wednesday. Single-family housing starts soared 15.8% to a seasonally adjusted annual pace of 992,000.
The data comes as homebuilders feel more confident about the housing market. Mortgage rates are at theirlowest level in over a year. Rates have been on a downward trend recently, with investors expecting the Fed to announce an interest rate cut at the conclusion of its policy meeting later Wednesday.
The data showed that building permits for single-family homes rose to a pace of 967,000, a 2.8% increase from July’s revised figure of 941,000. Meanwhile, permits for multifamily homes came in at a rate of 451,000 in August.
Wed, September 18, 2024 at 1:52 PM GMT+1
Dimon says the rate cut debate is overrated
JPMorgan Chase (JPM) CEO Jamie Dimon told a conference on Tuesday that any interest rate move by the Fed would “not going to be earth-shattering," arguing that "it’s a minor thing when the Fed’s raising rates and lowering rates because underneath that there’s a real economy.”
The comments follow Dimon telling CNBC last month that when it comes to the debate about how much the Fed cuts interest rates, "I don’t think it matters as much as other people think. You know, the rate effect itself isn’t that critical."
Wed, September 18, 2024 at 1:45 PM GMT+1
'The Fed cutting by 50 basis points is a real possibility'
From Yahoo Finance's Jennifer Schonberger:
"The Federal Reserve is widely expected to cut interest rates for the first time in four years Wednesday and outline the path for future rate cuts.
Investors have been hoping for a larger half-percentage-point cut versus a quarter-point cut. Traders, in recent days, have increased their wager that the central bank will cut by a deeper 50 basis points. Wednesday morning, fed funds futures were pricing in a better than 60% chance the Fed cuts by 50 basis points, up from just 15% odds a week ago.
'The Fed cutting by 50 basis points is a real possibility,' said Wilmer Stith, a bond trader for Wilmington Trust, who just last week thought it was more likely the central bank could cut by 25 basis points. He’s on the fence, though, as to whether it actually happens."
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